A new era of ‘Fair Work’

By Fay Calderone, Piers Mitchem and Alexandra Gallagher

The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022 is now on the floor of Parliament for discussion. The move by the Federal Government is intended to implement some of the most significant and wide-ranging changes to the employment and industrial relations landscape since the Fair Work Act 2009 (Cth) (FW Act) was introduced.

The Bill’s stated objectives include (among other things):

• boosting bargaining by removing unnecessary complexity, ensuring bargaining is genuine, fair and conducted in good faith, and making the better off overall (BOOT) test simple, flexible and fair;
• improving job security and gender equity by including both concepts in the objects of the FW Act, limiting the use of fixed term contracts, introducing a statutory remuneration principle and prohibiting pay secrecy clauses; and
• improving workplace conditions and protections by providing stronger access to flexible working arrangements, stronger protections for workers, including victims of sexual harassment, and enhancing small claims procedures to enable unpaid entitlement recovery.

Some of the key changes to the FW Act proposed by the Bill and designed to achieve the above objectives are set out in the table below.

Relevant proposed amendment	Comments
Better Off Overall Test (BOOT)	The Bill proposes to remove technicalities in the BOOT assessment. Instead, the BOOT will be assessed globally (that is, it will not be a line-by-line comparison against the relevant modern award as is currently the case).
Enterprise bargaining – multi employer bargaining and supported bargaining	Enterprise bargaining would be expanded to allow employees and unions to compel multiple employers to bargain for an enterprise agreement, where a majority of employees support doing so and where the employers have ‘clearly identifiable common interests’ (such as geographical location, the nature of their enterprises, and whether they share a common regulatory regime). Bargaining across multiple employers could also occur in low-paid industries such as aged care, disability care and early childhood education. In both cases, industrial action can occur across all relevant employers, subject to conditions including prior conciliation by the Fair Work Commission.
Equal remuneration	The Bill would expand on the existing framework for equal remuneration for work of equal or comparable value, including by: introducing a list of matters which the Fair Work Commission (FWC) may take into account when assessing whether there is equal remuneration; providing that, when hearing an application for an Equal Remuneration Order (ERO), the FWC would be required to make an ERO if it is satisfied that there is not equal remuneration for work of equal or comparable value.
Pay secrecy	The Bill would introduce new workplace rights, which would fall within the meaning of workplace rights protected by the general protections provisions of the FW Act, expressly allowing employees to ask one another about, and to disclose, their remuneration and relevant conditions. Employees would be able to use this information to assess whether their remuneration is fair and comparable to that of others in the same workplace or industry. Employees would not be compelled to make a disclosure in response to another employee’s request for information. As a result of the above proposed amendments, pay secrecy clauses in employment contracts and fair work instruments would be of no effect and could not be enforced by employers.
Positive duty to prohibit sexual harassment	Part 8 would be merged with the existing stop sexual harassment jurisdiction to create a new Part 3-5A ‘Prohibiting sexual harassment in connection with work’ to the FW Act The Bill introduces a new prohibition on sexual harassment of: a worker in a business or undertaking; a person seeking to become a worker in a business or undertaking; or a person conducting a business of undertaking. The prohibition would extend to sexual harassment by third parties, such as customers or clients. A principal may be vicariously liable for any sexual harassment perpetrated by the principal’s employee or agent, unless all reasonable steps are taken to prevent the sexual harassment. Under the proposed amendments, an application could be made to the FWC by one or more victims of sexual harassment for the FWC to: make a stop sexual harassment order (to prevent future harassment); or otherwise deal with the dispute (to remedy past harm caused by sexual harassment).
Anti-discrimination and special measures	The Bill introduces three further protected attributes into the anti-discrimination provisions of the FW Act – breastfeeding, gender identity and intersex status. The Bill would also amend the FW Act to confirm that special measures to achieve equality are matters pertaining to the employment relationship and therefore matters about which an enterprise agreement may be made (and not unlawful terms).
Fixed term contracts	The Bill would limit the use of fixed term contracts, subject to limited exceptions. The amendments proposed by the Bill would limit fixed term contracts for the same role to two consecutive contracts or a maximum duration of two years, while preserving legitimate use of fixed term contracts in certain circumstances. The limitations would not apply to fixed term contracts entered into by casual employees. Exceptions to the prohibition on fixed term contracts, that permit a contract to be entered into for longer than two years or that contains more than one option for renewal, include (but are not limited to) where the: employee has specialised skills that the employer does not have but requires to complete a specific task; employee is engaged as part of a training arrangement; employer needs additional workers to do essential work during a peak period, such as fruit picking or other seasonal work; employee earns over the high income threshold for the first year of the contract; or employer is reliant on government funding or other specified funding to directly fund the employee’s position in whole or in part. Civil penalties would apply to an employer who enters into a fixed term contract in contravention of the provisions.
Flexible work	The Bill proposes amendments to the National Employment Standards to: expand the circumstances in which an employee may request flexible working to include where they or a member of their immediate family or household experiences family or domestic violence; support employee access to flexible working arrangements by strengthening employer obligations when considering an employee’s request, based on the model award term developed by the FWC: more detailed procedure to be introduced specifying how employers must respond to requests; employers would be required to discuss requests with employees and genuinely try and reach agreement prior to refusing an employee’s request; employers would also be required to provide detailed reasons for any refusal (including how the particular business grounds being relied on apply to the request), and inform the employee of any alternative working arrangements the employer would be willing to make instead; and introduce dispute resolution provisions enabling the FWC to make a range of orders where an employer refuses an employee’s request or does not respond to the request within 21 days.

 

We will be tracking the Bill’s progress through parliament, given the extent and significance of the changes it proposes. Stay tuned for further updates.